Security Capital Assurance Ltd, the parent of bond insurer XL Capital Assurance Inc., today said it has been notified that is is not in compliance with the New York Stock Exchange’s continuing listing standards.
SCA said in a filing with the Securities and Exchange Commission that it received notification from the NYSE last week advising it that SCA’s shares, which have traded this year between a high of $3.99 and a low, at today’s close of $0.56, was not in compliance with the exchange’s listing standard applicable to its common shares.
In the notification received on April 3, 2008, the NYSE advised SCA that its common shares were "below criteria" for the average price of a security. According to the NYSE price criteria for common shares, a company is considered to be below compliance standards if the average closing price of a security as reported on the consolidated tape is less than $1.00 over a consecutive 30 trading-day period. As of April 1, 2008, the company's common shares reached a 30 trading-day average closing price of $0.98.
In a statement today, SCA said it notified the NYSE that it intends to cure the average price deficiency and maintain its listing.
“However, there can be no assurance that the Company will be successful in its attempt to cure the deficiency,” the statement said..
Beginning in December, rating agencies have lowered the insurer financial strength rating several times on the formerly triple-A rated XLCA, based on its exposure to securities backed by subprime mortgages. The insurer is now rated A3 on review for possible downgrade by Moody’s Investors Service, A-minus on negative watch by Standard & Poor’s, and to junk-level BB with a negative outlook by Fitch Ratings.
Just before the Fitch downgrade in late March, XLCA announced that it would cut 60 positions in order to reduce operating costs.
XLCA guaranteed three deals so far this year through the end of March, with a total par value of $35.6 million, making it the seventh busiest insurer in 2008, according to data from Thomson Financial.